Ravages of COVID-19: Bitcoin is more insecure
The Covid-19 has created more havoc in the crypto market. Bitcoin is now more insecure when experiencing a drop in its hashrate. What’s going on?!
The Covid-19 pandemic has created too much havoc in the crypto market. First, we observe red markets for days, and now, as a result of falling prices, Bitcoin is more insecure. After reaching its 2020 peak, the Bitcoin (BTC) hashrate has experienced the second-biggest drop in its history.
What is hashrate and mining difficulty?
The hashrate is the speed with which a computer completes an operation on the Bitcoin network. Therefore, to calculate the hashrate of the Bitcoin network, an average of the last 10 minutes is used, since it is precisely this time that each block takes to extract or resolve.
This is why a higher hashrate means more competition between miners to validate new blocks and, consequently, increases the amount of resources required to carry out a 51% attack. And, this translates to making Bitcoin more secure.
However, it is affected with moments of uncertainty external to Bitcoin and the crypto market, as is the case of COVID-19.
Difficulty is a relative measure of how difficult it is to find a hash that is less than the defined goal. In this way, it is adjusted after every 2,016 blocks to maintain a constant block verification time of approximately 10 minutes.
As you can see, both concepts are closely correlated. That is why, when the hashrate collapses, the difficulty also does.
If you want to know more about how Bitcoin mining works, we invite you to read the following article on CryptoTrend.
Situation with Bitcoin and COVID-19
The hashrate is one of the most important measures, since it represents the estimated number of tera hash per second that the Bitcoin network performs. In this way, the hashrate was reduced from 136.27 EH / s on February 29 to 75.7 EH / s yesterday.
This drop was anticipated by experts, however not at this magnitude. Likewise, the so-called “mining difficulty” has fallen, expressing that some miners have decided to abandon the network due to the fall in prices. Events such as this can be predicted by considering the situation with the COVID-19.
Bitcoin mining difficulty decreased by 16%, representing the second-biggest drop in its history. This is how it went from 16.55 T on March 9 to 13.91 T yesterday.
However, it seems that the fall is far from over. And it is that, BTC.com estimates that the next adjustment would see a drop of 15.25%, reaching then 11.79 T. Considering that the situation with COVID-19 seems far from being close to ending.
As we noted earlier, this crash may cost the security of the Bitcoin network. And it is that currently only approximately $ 10 million in hashpower is required to master the Bitcoin Blockchain. Let’s keep in mind that the attack would now be $ 11 million cheaper than in January, according to data offered by Messari Pro to Decrypt.
Therefore, Bitcoin is now more insecure, as a 51% attack could trigger the reversal of recent transactions. Therefore, COVID-19 is an important factor in cryptocurrency today.
What caused Bitcoin to be more insecure?
As we said earlier, the difficulty peaked on March 9, a few days before Black Thursday. This was a terrible blow to the miners, given that their two nightmares came together.
They had record mining competition, at the same time as a terrible price drop occurred, resulting in lower profitability, particularly for those with old mining equipment. And, therefore, they decide to leave the network.
It can be seen that COVID-19 can affect Bitcoin, and the crypto market in general, in more ways than one.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.